BILL NUMBER: SB 1939 AMENDED BILL TEXT AMENDED IN SENATE APRIL 13, 2000 AMENDED IN SENATE APRIL 5, 2000 AMENDED IN SENATE MARCH 28, 2000 INTRODUCED BYSenator AlarconSenators Alarcon and Solis FEBRUARY 24, 2000 An act to amend Section 385 of, and to add Section 9607 to, the Public Utilities Code, and to amend Section 22120 of the Water Code, relating to public utilities. LEGISLATIVE COUNSEL'S DIGEST SB 1939, as amended, Alarcon. Public utilities: electric power. (1) Existing law requires each local publicly owned utility to establish a nonbypassable usage based charge to fund investments in specified public purpose programs, including providing services for low-income electricity customers. The charge is required to be not less than the lowest expenditure of the 3 largest electrical corporations in California based on a percentage of revenue. This bill would require a specified percentage of charge revenues to be invested in programs servicing low-income electricity customers. Because a violation of this provision would be a crime, this bill would impose a state-mandated local program by creating a new crime. (2) The Irrigation District Law authorizes an irrigation district that is governed under that law to sell, dispose of, and distribute electric power for use outside its boundaries. This bill would require the Public Utilities Commission toapprove the sale ofcertify a district to sell electricityby an irrigation districtin the service territory of specified entities , as prescribed .Prior to granting approval, the commission would be required to make findings, as prescribed. The bill would prohibit a district from providing electric service to a retail customer of an electrical corporation or a publicly owned utility, unless the customer first confirms in writing an obligation to pay to the electrical corporation or publicly owned utility currently providing service, a nonpassable public purpose charge imposed by the regulatory body for that electrical corporation or publicly owned utility.Because this bill would increase the duties of local entities by requiring them to obtain commissionapprovalcertification in order to sell electricity, it would impose a state-mandated local program. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 385 of the Public Utilities Code is amended to read: 385. (a) Except as provided in subdivision (b), each local publicly owned electric utility shall establish a nonbypassable, usage based charge on local distribution service of not less than the lowest expenditure level of the three largest electrical corporations in California on a percent of revenue basis, calculated from each utility's total revenue requirement for the year ended December 31, 1994, and each utility's total annual expenditure under paragraphs (1), (2), and (3) of subdivision (c) of Section 381 and Section 382, to fund investments by the utility and other parties in the low-income programs described in subdivision (b), and in any or all of the following: (1) Cost-effective demand-side management services to promote energy efficiency and energy conservation. (2) New investment in renewable energy resources and technologies consistent with existing statutes and regulations which promote those resources and technologies. (3) Research, development and demonstration programs for the public interest to advance science or technology which is not adequately provided by competitive and regulated markets. (b) Each local publicly owned electric utility shall establish and fund programs servicing low-income electricity customers comparable to those established under Section 382 . Those programs shall include, but are not limited to, targeted energy efficiency services , outreach and education, and rate discounts. The percentage of thenonbypassable, usage based charge allocated to the low-income programs shall be not less than the percentage required for investor-owned utilities in Section 382 and shall be based on an assessment of customer need.charge established under subdivision (a) allocated to low-income programs shall be not less than the percentage of charge revenues allocated to low-income programs in 1999 by the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District, and shall be based on a demographic representation of need. SEC. 2. Section 9607 is added to the Public Utilities Code, to read: 9607. (a) Notwithstanding Section 9604, for purposes of this section, "district" means an irrigation district furnishing electric services formed pursuant to the Irrigation District Law as set forth in Division 11 (commencing with Section 20500) of the Water Code. (b) Notwithstanding any other provision of law, adistrict may not, without the prior approval of the commissiondistrict may, to the extent consistent with subdivision (b) of Section 9605 , construct, lease, acquire, or operate facilities for thedistribution of electricitypurpose of serving retail electric customers located in the service territory of an electrical corporation providing electric distribution services as that territory existed on January 1, 2000, or in the service territory of a local publicly owned electric utility providing electric distribution services as of January 1, 2000. (c) The commission may not approve the request of a district to provide distribution of electricity in the service territory of an entity as set forth in subdivision (a) unless the commission determines all of the following: (1) Service by the district within the service territory is consistent with the policies of the state, as set forth in Section 8101. (2) The district has established and funded public purpose and low-income programs in accordance with subdivisions (a) and (b) of Section 385. (3) The district has provided universal service to all customers who request service at the published tariff rates within the territory to be served. (4) The district has adopted consumer protection and direct transaction provisions comparable to those established by the Public Utilities Commission for electrical corporations. (d) A district may not provide partial or full electric service to a retail customer of an electrical corporation or a publicly owned utility, unless the customer of that electrical corporation or publicly owned utility first confirms in writing an obligation to pay, through tariff or otherwise, to the electrical corporation or publicly owned utility currently providing service, a nonbypassable public purpose charge imposed by the regulatory body for that electrical corporation or publicly owned utility. The charge shall be paid directly to the electrical corporation or publicly owned utility providing electricity in the service territory in which the customer is located., if the district has obtained certification, as described in subdivision (c), that its public purpose, universal service, and consumer protections programs are comparable to those of the current distribution service provider. (c) The district shall request certification from the commission to serve retail customers located in the service territory of an electrical corporation and from the local regulatory body of the local publicly owned electric utility's service territory. The commission, upon notice and with opportunity to be heard as provided in Article 1 (commencing with Section 1701) of Chapter 9 of Part 1, shall issue a decision or resolution certifying the district's programs, if it determines all of the following: (1) The district has established and funded public purpose and low-income programs in accordance with Section 385. (2) The district will provide universal service to all retail customers who request service within the territory to be served, at published tariff rates and on a just, reasonable, and nondiscriminatory basis, comparable to that provided by the current distribution service provider. (3) The district will provide consumer protection and direct transaction provisions comparable to those established for the current distribution service provider and service by the district within the service territory will be consistent with the policies of this state to prevent or eliminate economic waste as set forth in Section 8101. SEC. 3. Section 22120 of the Water Code is amended to read: 22120. Except as provided in Section 9607 of the Public Utilities Code, a district may sell, dispose of, and distribute electric power for use outside of its boundaries. SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution for certain costs that may be incurred by a local agency or school district because in that regard this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. However, notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.